Audit and Assurance news

The FRC has issued guidance for audit firms on eligibility criteria in the context of the firm’s system of quality management and the performance of engagements. ISQM (UK) 1 and ISQM (UK) 2 have been reissued with updated footnotes to reflect this guidance.   View the guidance and ISQMs (UK).

The Irish Auditing and Accounting Supervisory Authority (IAASA) has published a summary of the outcomes of its examinations of financial reports completed in 2022. This summary outlines the findings from financial statement examinations completed by IAASA’s Financial Reporting Supervision Unit in 2022. The summary shows that the level of compliance by companies with financial reporting requirements is generally good particularly among equity issuers. However, certain companies, particularly some fund and debt issuers, have further progress to make in achieving consistently high-quality financial reports. Utilising the range of powers at its disposal, three companies were required by IAASA to publish corrective public notices which highlighted deficiencies in their published financial reports. The summary illustrates the growing impact of climate change and climate impact mitigation initiatives on companies. It also reflects the increasing focus of IAASA and accounting enforcers generally on the financial reporting implications of climate change and climate commitments by companies. This is a feature that we expect to assume increasing significance in the future as companies move to comply with emerging climate reporting standards. The summary may be accessed here

IAASA has published the 2022 quality assurance review reports in respect of seven firms that perform statutory audits of public-interest entities. In Ireland, public-interest entities include listed companies and companies that operate in the banking and insurance sectors. The reports can be accessed here

A new publication from Accountancy Europe builds on the factsheet published last year and offers constructive recommendations based on the discussions with their members’ audit experts as well as external stakeholders involved in developing AQI initiatives in their respective jurisdictions. The paper highlights the key considerations for developing and using AQIs to support potential debates that could take place among the European Commission, the Committee of European Audit Oversight Bodies (CEAOB), national policymakers and regulators, auditors, as well as other parties. Accountancy Europe want to keep contributing to this debate; since the evolution of AQI reporting as a means to support audit quality requires continuous discussion with all relevant stakeholders. To support this objective and build on the factsheet (May 2022), this publication: defines key concepts related to audit quality presents considerations for developing Audit Quality Indicators (AQIs) explains what can and cannot be achieved by AQI reporting AQIs are not ends themselves but are one important means to increase the audit work’s transparency and to support consistent, high-quality audits. A blend of AQIs can help focus on the areas where improvement is needed. Key factors to develop and use audit quality indicators - Accountancy Europe

This video provides information on the revised ISA (Ireland) 315 Identifying and Assessing the Risks of Material Misstatement. ISA 315 is effective for financial periods beginning on or after 15 December 2021. IAASA video presentation on the revised ISA (Ireland) 315 – IAASA

IAASA has published its key messages for auditors in the area of related parties, available here . IAASA’s YouTube channel also now includes a video that shares questions asked by IAASA’s audit inspectors during 2022 in the area of related parties, available here.